Rebalancing in bear market de-cumulation

[Deleted User]

MK62 said:

Deleted_User said:

Audaxer said:

Deleted_User said:

dunstonh said:

So if you keep a 60:40 portfolio and you want to prioritise the cash buffer when drawing down, how do you restore the balance to 60:40?

Once a year you rebalance the 60/40 and decide if the cash float needs refloating.  If it's not a good time to sell the investments to cash then you defer that decision. If it is a good time, then you do.

That’s advice to, quite  literally, time the market.  Bad investment advice. 

The body of literature describing why its a bad idea is overwhelming.  The reason people rebalance is to keep portfolio risk exposure at an acceptable level.  Telling someone in the early phases of retirement to increase risk is as bad as it gets. 

How is that bad investment advice, as he is saying to rebalance to 60/40 to keep risk exposure at that level?

That’s not bad advice. But that’s not what he is saying. He is telling the guy to not sell equity, not rebalance if it is “bad time”.  See above. 

That's not how I read it.........he was saying to rebalance your portfolio, but then to decide whether to move any into cash.....you don't have to do both at the same time. Whenever you decide to sell to cash you could argue you are timing the market, but you have to do it at some point, so it's either random, on a whim, or a judgement call.....I know which I'd rather do....
PS....I suppose you could also do it on a fixed date each year...in a rigid plan....but then why have a cash buffer if your plan is rigid like that?

There are two fundamental approaches:

1. One involves judgements up front.  

You may plan to rebalance on a date or whenever you deviated from target allocation by X percent.  Or a mix.   Or a similar automated strategy which removes the need for day to day judgments

2. You keep making ongoing “judgements”.  

You decide if the value of stock is “low” or “high” and, crucially, use your crystal ball to call next market moves. 

The second approach is bad.  Human emotions evolved many thousands of years ago and not for the purposes of trading stocks.  Ongoing decision making damages returns.  Thats why even active funds use automated algorithms and software to make decisions in place of humans.  All decisions on when to trigger selling or buying are made well in advance rather than in the heat of the moment.  

Timing the market is bad for your pocket.  Apart from everything else you have to guess right multiple times to gain.  And its going to take emotional toll. 

Using 1  to 4 funds and using  target allocations is very simple.  Anyone can do it. And it works.  Unfortunately, its bad for advisor’s job security.  Exactly because its simple and it works.  So advisors are incentivised to recommend complex mixes involving ongoing decision making. 

[Deleted User]

Audaxer said:

Deleted_User said:

Audaxer said:

Deleted_User said:

dunstonh said:

So if you keep a 60:40 portfolio and you want to prioritise the cash buffer when drawing down, how do you restore the balance to 60:40?

Once a year you rebalance the 60/40 and decide if the cash float needs refloating.  If it's not a good time to sell the investments to cash then you defer that decision. If it is a good time, then you do.

That’s advice to, quite  literally, time the market.  Bad investment advice. 

The body of literature describing why its a bad idea is overwhelming.  The reason people rebalance is to keep portfolio risk exposure at an acceptable level.  Telling someone in the early phases of retirement to increase risk is as bad as it gets. 

How is that bad investment advice, as he is saying to rebalance to 60/40 to keep risk exposure at that level?

That’s not bad advice. But that’s not what he is saying. He is telling the guy to not sell equity, not rebalance if it is “bad time”.  See above. 

I read it as he was saying you rebalance back to 60/40 once a year whatever the state of the market, and separately decide whether to put more cash into your cash float/buffer. If for example the cash buffer is low from using cash for income in recent times, and markets are now rising again, that would seem to me to be the right time to sell some equity to replenish the cash buffer.

The bit about markets rising again = market timing.  Its not relevant.  You don’t know what will come up on the news tomorrow unless you have a crystal ball. 

[Deleted User]

DT2001 said:

Deleted_User said:

dunstonh said:

So if you keep a 60:40 portfolio and you want to prioritise the cash buffer when drawing down, how do you restore the balance to 60:40?

Once a year you rebalance the 60/40 and decide if the cash float needs refloating.  If it's not a good time to sell the investments to cash then you defer that decision. If it is a good time, then you do.

As for the frequency of rebalancing, there are different approaches.  Once a year is one of them.  Here is another popular approach (Larry Swedroe’s 5/25 rule): https://awealthofcommonsense.com/2014/03/larry-swedroe-525-rebalancing-rule/

Does that approach assume bonds do well when equities don’t?

Of course not. Its agnostic on what will do well and when. 

Compared to the rebalancing on a fixed date, this approach typically results in less frequent buying and selling.  Usually there are ongoing flows into or out of portfolio which do most of the rebalancing anyway.  Takes a huge market move to breach the 5/25 threshold.   

Swidroe’s method also allows a bit more momentum but that’s not not the primary reason for using it. 

Prism

zagfles said:
It's pointless having a long term plan if you don't stick to it and make short term market timing decisions. If your long term plan is something like Prime Harvesting for instance, you'll never sell equities except after they've risen by a substantive amount eg 20% (unless you end in the extreme scenario of 100% equities, but in such cases most alternative strategies would likely have fared far worse).

A plan that eg involves selling equities once a year to fund withdrawals doesn't seem sensible, it's far too tempting to give in to short term market timing temptation. A strategy like PH is also market timing, but on a far longer term scale. As are virtually all drawdown and even accumulation strategies when you think about it, as they all make the underlying assumption that equities grow long term, otherwise why use equities?

So it's still a gamble, but less of a gamble than short term speculation of market direction. Longer term prediction of market direction is more reliable though obviously not totally reliable. So stuff like PH effectively extends and long-term'ises the "cash buffer" strategy, with a solid defined plan rather than relying on off the cuff "judgement calls" where your speculate on short term market movements.

PS I'm not saying PH is the best strategy and it's right for everyone, I'm not even totally sure I'll use it myself, but I'll certainly be using some sort of long term strategy that doesn't rely on having to make judgements on short term market movements, and is based on a logical rather than emotional attitude to risk.

I will be using Prime Harvesting, more likely the alternative version. Its a very simple yet effective combination of the strong 'bonds first' model with the annual rebalance. I will treat cash, as you say typically outside of the pension wrapper, as part of the bonds allocation and just rebalance annually within that.

zagfles

MK62 said:

Out of curiosity then, when does your plan tell you to make your cash withdrawal(s), and what criteria drive that decision?

I've not totally decided on my plan yet but it'll likely be based on PH with, as Prism says, cash treated as part of the bonds allocation. So drawing spending money from cash or bonds will be the norm. Equities never sold until the 20% rise threshold is met (unless cash/bonds run out), and never bought. Starting with a significant cash/bonds allocation, possibly something like 20% cash, 20% bonds, 60% equities.

The withdrawal amount I've not decided on yet, but it'll likely vary year to year, more with spending requirements than anything else eg whether I need a new car, bathroom, want an expensive holiday etc. I won't have a separate "pot" for capital expenditure, everything will be considered as one pot. But I'll also look at variable withdrawal strategies, not done that yet. I only really need it to last 20 years or so as we'll likely defer our state pensions so added to our DB pensions should be sufficent post 75, although I expect to have some left over. But we won't starve if not.

MK62

zagfles said:

MK62 said:

zagfles said:

MK62 said:

zagfles said:

MK62 said:

Deleted_User said:

Audaxer said:

Deleted_User said:

dunstonh said:

So if you keep a 60:40 portfolio and you want to prioritise the cash buffer when drawing down, how do you restore the balance to 60:40?

Once a year you rebalance the 60/40 and decide if the cash float needs refloating.  If it's not a good time to sell the investments to cash then you defer that decision. If it is a good time, then you do.

That’s advice to, quite  literally, time the market.  Bad investment advice. 

The body of literature describing why its a bad idea is overwhelming.  The reason people rebalance is to keep portfolio risk exposure at an acceptable level.  Telling someone in the early phases of retirement to increase risk is as bad as it gets. 

How is that bad investment advice, as he is saying to rebalance to 60/40 to keep risk exposure at that level?

That’s not bad advice. But that’s not what he is saying. He is telling the guy to not sell equity, not rebalance if it is “bad time”.  See above. 

That's not how I read it.........he was saying to rebalance your portfolio, but then to decide whether to move any into cash.....you don't have to do both at the same time. Whenever you decide to sell to cash you could argue you are timing the market, but you have to do it at some point, so it's either random, on a whim, or a judgement call.....I know which I'd rather do....
PS....I suppose you could also do it on a fixed date each year...in a rigid plan....but then why have a cash buffer if your plan is rigid like that?

Or it's based on a well researched long term strategy rather than random, whim or "judgement call"

.....the irony is that your "well researched long term strategy" will be full of "judgement calls"....they all are, it's just that they are made in advance, rather than at the time......

There's a difference between using a long term plan and sticking to it than making it up as you go along.

Perhaps, but who said anything about not having a long term plan?......all we are talking about here is deciding when to sell assets to cash in order to make a withdrawal. I will most likely be making a withdrawal in the next tax year (and so selling assets to cash to do just that) .......at the moment, I doubt very much I'll be doing that in April, but if your "long term plan" says to do just that, then fine, go with it. I will however rebalance things.

zagfles said:

 Do people do the same during the accumulation phase?

"No, I won't invest my pension contribution this month, the market's very high, I'll leave it in cash for now"

I'd wager anyone who made such "judgement calls" during the accumulation phase is worse off than someone who just stuck with the plan of investing their contribution monthly without thinking they know better than the market. Short term market timing is a mug's game.

No, they don't in general.......but the decumulation phase isn't the same.......during accumulation, downturns are an opportunity, whereas in decumulation, they are anything but........

As for your wager.....well there's no way to know either way. I suspect over the last 10 years, you may well be right.....apart from a few blips it's generally been a constantly rising market until now......but perhaps over the preceding 10 years the story might be very different.......and as for the next 10, well who knows?

It's pointless having a long term plan if you don't stick to it and make short term market timing decisions. If your long term plan is something like Prime Harvesting for instance, you'll never sell equities except after they've risen by a substantive amount eg 20% (unless you end in the extreme scenario of 100% equities, but in such cases most alternative strategies would likely have fared far worse).

A plan that eg involves selling equities once a year to fund withdrawals doesn't seem sensible, it's far too tempting to give in to short term market timing temptation. A strategy like PH is also market timing, but on a far longer term scale. As are virtually all drawdown and even accumulation strategies when you think about it, as they all make the underlying assumption that equities grow long term, otherwise why use equities?

So it's still a gamble, but less of a gamble than short term speculation of market direction. Longer term prediction of market direction is more reliable though obviously not totally reliable. So stuff like PH effectively extends and long-term'ises the "cash buffer" strategy, with a solid defined plan rather than relying on off the cuff "judgement calls" where your speculate on short term market movements.

PS I'm not saying PH is the best strategy and it's right for everyone, I'm not even totally sure I'll use it myself, but I'll certainly be using some sort of long term strategy that doesn't rely on having to make judgements on short term market movements, and is based on a logical rather than emotional attitude to risk.

Yet despite all that, you still haven't said when you'll make your sales to cash for withdrawal........the PH strategy tells you what to sell, and how much to sell, but it doesn't tell you when to sell.........I can only assume you'll be doing it on a fixed and predetermined date each year/month, as anything else would be "market timing".

As for "they all make the underlying assumption that equities grow long term"....that's true, but in decumulation, the sequence of those annual returns can lead to hugely differing outcomes......and any plan which ignores that is at increased risk of long term failure.

Prism

MK62 said:

zagfles said:

MK62 said:

zagfles said:

MK62 said:

zagfles said:

MK62 said:

Deleted_User said:

Audaxer said:

Deleted_User said:

dunstonh said:

So if you keep a 60:40 portfolio and you want to prioritise the cash buffer when drawing down, how do you restore the balance to 60:40?

Once a year you rebalance the 60/40 and decide if the cash float needs refloating.  If it's not a good time to sell the investments to cash then you defer that decision. If it is a good time, then you do.

That’s advice to, quite  literally, time the market.  Bad investment advice. 

The body of literature describing why its a bad idea is overwhelming.  The reason people rebalance is to keep portfolio risk exposure at an acceptable level.  Telling someone in the early phases of retirement to increase risk is as bad as it gets. 

How is that bad investment advice, as he is saying to rebalance to 60/40 to keep risk exposure at that level?

That’s not bad advice. But that’s not what he is saying. He is telling the guy to not sell equity, not rebalance if it is “bad time”.  See above. 

That's not how I read it.........he was saying to rebalance your portfolio, but then to decide whether to move any into cash.....you don't have to do both at the same time. Whenever you decide to sell to cash you could argue you are timing the market, but you have to do it at some point, so it's either random, on a whim, or a judgement call.....I know which I'd rather do....
PS....I suppose you could also do it on a fixed date each year...in a rigid plan....but then why have a cash buffer if your plan is rigid like that?

Or it's based on a well researched long term strategy rather than random, whim or "judgement call"

.....the irony is that your "well researched long term strategy" will be full of "judgement calls"....they all are, it's just that they are made in advance, rather than at the time......

There's a difference between using a long term plan and sticking to it than making it up as you go along.

Perhaps, but who said anything about not having a long term plan?......all we are talking about here is deciding when to sell assets to cash in order to make a withdrawal. I will most likely be making a withdrawal in the next tax year (and so selling assets to cash to do just that) .......at the moment, I doubt very much I'll be doing that in April, but if your "long term plan" says to do just that, then fine, go with it. I will however rebalance things.

zagfles said:

 Do people do the same during the accumulation phase?

"No, I won't invest my pension contribution this month, the market's very high, I'll leave it in cash for now"

I'd wager anyone who made such "judgement calls" during the accumulation phase is worse off than someone who just stuck with the plan of investing their contribution monthly without thinking they know better than the market. Short term market timing is a mug's game.

No, they don't in general.......but the decumulation phase isn't the same.......during accumulation, downturns are an opportunity, whereas in decumulation, they are anything but........

As for your wager.....well there's no way to know either way. I suspect over the last 10 years, you may well be right.....apart from a few blips it's generally been a constantly rising market until now......but perhaps over the preceding 10 years the story might be very different.......and as for the next 10, well who knows?

It's pointless having a long term plan if you don't stick to it and make short term market timing decisions. If your long term plan is something like Prime Harvesting for instance, you'll never sell equities except after they've risen by a substantive amount eg 20% (unless you end in the extreme scenario of 100% equities, but in such cases most alternative strategies would likely have fared far worse).

A plan that eg involves selling equities once a year to fund withdrawals doesn't seem sensible, it's far too tempting to give in to short term market timing temptation. A strategy like PH is also market timing, but on a far longer term scale. As are virtually all drawdown and even accumulation strategies when you think about it, as they all make the underlying assumption that equities grow long term, otherwise why use equities?

So it's still a gamble, but less of a gamble than short term speculation of market direction. Longer term prediction of market direction is more reliable though obviously not totally reliable. So stuff like PH effectively extends and long-term'ises the "cash buffer" strategy, with a solid defined plan rather than relying on off the cuff "judgement calls" where your speculate on short term market movements.

PS I'm not saying PH is the best strategy and it's right for everyone, I'm not even totally sure I'll use it myself, but I'll certainly be using some sort of long term strategy that doesn't rely on having to make judgements on short term market movements, and is based on a logical rather than emotional attitude to risk.

Yet despite all that, you still haven't said when you'll make your sales to cash for withdrawal........the PH strategy tells you what to sell, and how much to sell, but it doesn't tell you when to sell.........I can only assume you'll be doing it on a fixed and predetermined date each year/month, as anything else would be "market timing".

As for "they all make the underlying assumption that equities grow long term"....that's true, but in decumulation, the sequence of those annual returns can lead to hugely differing outcomes......and any plan which ignores that is at increased risk of long term failure.

Part of the withdrawal and rebalancing process is to calculate the inflation rate for the preceding year. Much like the issue with the state pension being based just on a specific months change if you picked just a single month you might get an inaccurate figure. So I would think doing the yearly rebalance sometime after the yearly inflation figure comes out which is mid to late January. Any time between then and maybe the new tax year seems a good period to do the calculations.

coyrls

Annual inflation rates are released each month.  I do my calculation based on the February inflation figure and withdraw money in March, just before the end of the tax year.

zagfles

MK62 said:

zagfles said:

MK62 said:

zagfles said:

MK62 said:

zagfles said:

MK62 said:

Deleted_User said:

Audaxer said:

Deleted_User said:

dunstonh said:

So if you keep a 60:40 portfolio and you want to prioritise the cash buffer when drawing down, how do you restore the balance to 60:40?

Once a year you rebalance the 60/40 and decide if the cash float needs refloating.  If it's not a good time to sell the investments to cash then you defer that decision. If it is a good time, then you do.

That’s advice to, quite  literally, time the market.  Bad investment advice. 

The body of literature describing why its a bad idea is overwhelming.  The reason people rebalance is to keep portfolio risk exposure at an acceptable level.  Telling someone in the early phases of retirement to increase risk is as bad as it gets. 

How is that bad investment advice, as he is saying to rebalance to 60/40 to keep risk exposure at that level?

That’s not bad advice. But that’s not what he is saying. He is telling the guy to not sell equity, not rebalance if it is “bad time”.  See above. 

That's not how I read it.........he was saying to rebalance your portfolio, but then to decide whether to move any into cash.....you don't have to do both at the same time. Whenever you decide to sell to cash you could argue you are timing the market, but you have to do it at some point, so it's either random, on a whim, or a judgement call.....I know which I'd rather do....
PS....I suppose you could also do it on a fixed date each year...in a rigid plan....but then why have a cash buffer if your plan is rigid like that?

Or it's based on a well researched long term strategy rather than random, whim or "judgement call"

.....the irony is that your "well researched long term strategy" will be full of "judgement calls"....they all are, it's just that they are made in advance, rather than at the time......

There's a difference between using a long term plan and sticking to it than making it up as you go along.

Perhaps, but who said anything about not having a long term plan?......all we are talking about here is deciding when to sell assets to cash in order to make a withdrawal. I will most likely be making a withdrawal in the next tax year (and so selling assets to cash to do just that) .......at the moment, I doubt very much I'll be doing that in April, but if your "long term plan" says to do just that, then fine, go with it. I will however rebalance things.

zagfles said:

 Do people do the same during the accumulation phase?

"No, I won't invest my pension contribution this month, the market's very high, I'll leave it in cash for now"

I'd wager anyone who made such "judgement calls" during the accumulation phase is worse off than someone who just stuck with the plan of investing their contribution monthly without thinking they know better than the market. Short term market timing is a mug's game.

No, they don't in general.......but the decumulation phase isn't the same.......during accumulation, downturns are an opportunity, whereas in decumulation, they are anything but........

As for your wager.....well there's no way to know either way. I suspect over the last 10 years, you may well be right.....apart from a few blips it's generally been a constantly rising market until now......but perhaps over the preceding 10 years the story might be very different.......and as for the next 10, well who knows?

It's pointless having a long term plan if you don't stick to it and make short term market timing decisions. If your long term plan is something like Prime Harvesting for instance, you'll never sell equities except after they've risen by a substantive amount eg 20% (unless you end in the extreme scenario of 100% equities, but in such cases most alternative strategies would likely have fared far worse).

A plan that eg involves selling equities once a year to fund withdrawals doesn't seem sensible, it's far too tempting to give in to short term market timing temptation. A strategy like PH is also market timing, but on a far longer term scale. As are virtually all drawdown and even accumulation strategies when you think about it, as they all make the underlying assumption that equities grow long term, otherwise why use equities?

So it's still a gamble, but less of a gamble than short term speculation of market direction. Longer term prediction of market direction is more reliable though obviously not totally reliable. So stuff like PH effectively extends and long-term'ises the "cash buffer" strategy, with a solid defined plan rather than relying on off the cuff "judgement calls" where your speculate on short term market movements.

PS I'm not saying PH is the best strategy and it's right for everyone, I'm not even totally sure I'll use it myself, but I'll certainly be using some sort of long term strategy that doesn't rely on having to make judgements on short term market movements, and is based on a logical rather than emotional attitude to risk.

Yet despite all that, you still haven't said when you'll make your sales to cash for withdrawal........the PH strategy tells you what to sell, and how much to sell, but it doesn't tell you when to sell.........I can only assume you'll be doing it on a fixed and predetermined date each year/month, as anything else would be "market timing".

Eh? That's perfectly clear in the PH plan, as I said above. You sell when equities have risen 20% (above inflation). That's when. Obviously there's the question of how often you check, probably monthly, or maybe more often if you're getting close. In the meantime, you drawdown from cash/bonds.

As for "they all make the underlying assumption that equities grow long term"....that's true, but in decumulation, the sequence of those annual returns can lead to hugely differing outcomes......and any plan which ignores that is at increased risk of long term failure.

You really don't get it. PH doesn't "ignore" SOR risk, it's what it's designed for! It prevents having to sell equities during periods of bad returns in all but the most extreme circumstances, provided you start from a relatively high bonds/cash percentage, which as above I intend to. Read McClung's book, or at least the free part of it linked from the the monevator link above. 

zagfles

Prism said:

MK62 said:

zagfles said:

MK62 said:

zagfles said:

MK62 said:

zagfles said:

MK62 said:

Deleted_User said:

Audaxer said:

Deleted_User said:

dunstonh said:

So if you keep a 60:40 portfolio and you want to prioritise the cash buffer when drawing down, how do you restore the balance to 60:40?

Once a year you rebalance the 60/40 and decide if the cash float needs refloating.  If it's not a good time to sell the investments to cash then you defer that decision. If it is a good time, then you do.

That’s advice to, quite  literally, time the market.  Bad investment advice. 

The body of literature describing why its a bad idea is overwhelming.  The reason people rebalance is to keep portfolio risk exposure at an acceptable level.  Telling someone in the early phases of retirement to increase risk is as bad as it gets. 

How is that bad investment advice, as he is saying to rebalance to 60/40 to keep risk exposure at that level?

That’s not bad advice. But that’s not what he is saying. He is telling the guy to not sell equity, not rebalance if it is “bad time”.  See above. 

That's not how I read it.........he was saying to rebalance your portfolio, but then to decide whether to move any into cash.....you don't have to do both at the same time. Whenever you decide to sell to cash you could argue you are timing the market, but you have to do it at some point, so it's either random, on a whim, or a judgement call.....I know which I'd rather do....
PS....I suppose you could also do it on a fixed date each year...in a rigid plan....but then why have a cash buffer if your plan is rigid like that?

Or it's based on a well researched long term strategy rather than random, whim or "judgement call"

.....the irony is that your "well researched long term strategy" will be full of "judgement calls"....they all are, it's just that they are made in advance, rather than at the time......

There's a difference between using a long term plan and sticking to it than making it up as you go along.

Perhaps, but who said anything about not having a long term plan?......all we are talking about here is deciding when to sell assets to cash in order to make a withdrawal. I will most likely be making a withdrawal in the next tax year (and so selling assets to cash to do just that) .......at the moment, I doubt very much I'll be doing that in April, but if your "long term plan" says to do just that, then fine, go with it. I will however rebalance things.

zagfles said:

 Do people do the same during the accumulation phase?

"No, I won't invest my pension contribution this month, the market's very high, I'll leave it in cash for now"

I'd wager anyone who made such "judgement calls" during the accumulation phase is worse off than someone who just stuck with the plan of investing their contribution monthly without thinking they know better than the market. Short term market timing is a mug's game.

No, they don't in general.......but the decumulation phase isn't the same.......during accumulation, downturns are an opportunity, whereas in decumulation, they are anything but........

As for your wager.....well there's no way to know either way. I suspect over the last 10 years, you may well be right.....apart from a few blips it's generally been a constantly rising market until now......but perhaps over the preceding 10 years the story might be very different.......and as for the next 10, well who knows?

It's pointless having a long term plan if you don't stick to it and make short term market timing decisions. If your long term plan is something like Prime Harvesting for instance, you'll never sell equities except after they've risen by a substantive amount eg 20% (unless you end in the extreme scenario of 100% equities, but in such cases most alternative strategies would likely have fared far worse).

A plan that eg involves selling equities once a year to fund withdrawals doesn't seem sensible, it's far too tempting to give in to short term market timing temptation. A strategy like PH is also market timing, but on a far longer term scale. As are virtually all drawdown and even accumulation strategies when you think about it, as they all make the underlying assumption that equities grow long term, otherwise why use equities?

So it's still a gamble, but less of a gamble than short term speculation of market direction. Longer term prediction of market direction is more reliable though obviously not totally reliable. So stuff like PH effectively extends and long-term'ises the "cash buffer" strategy, with a solid defined plan rather than relying on off the cuff "judgement calls" where your speculate on short term market movements.

PS I'm not saying PH is the best strategy and it's right for everyone, I'm not even totally sure I'll use it myself, but I'll certainly be using some sort of long term strategy that doesn't rely on having to make judgements on short term market movements, and is based on a logical rather than emotional attitude to risk.

Yet despite all that, you still haven't said when you'll make your sales to cash for withdrawal........the PH strategy tells you what to sell, and how much to sell, but it doesn't tell you when to sell.........I can only assume you'll be doing it on a fixed and predetermined date each year/month, as anything else would be "market timing".

As for "they all make the underlying assumption that equities grow long term"....that's true, but in decumulation, the sequence of those annual returns can lead to hugely differing outcomes......and any plan which ignores that is at increased risk of long term failure.

Part of the withdrawal and rebalancing process is to calculate the inflation rate for the preceding year. Much like the issue with the state pension being based just on a specific months change if you picked just a single month you might get an inaccurate figure. So I would think doing the yearly rebalance sometime after the yearly inflation figure comes out which is mid to late January. Any time between then and maybe the new tax year seems a good period to do the calculations.

ONS publish inflation figures monthly, or more usefully an inflation index so it's easy to check whether your equities have gone up 20% over inflation. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/january2022

Is current equity value more than 20% over original equity value * current inflation index / original inflation index.

Of course you need to decide which inflation measure to use, RPI probably not a good idea as it's being phased out and doesn't calculate inflation "properly" anyway. So probably CPI or CPIH. Probably makes very little difference long term.